SINGAPORE: Changes to solar panel technology are accelerating demand for silver, a phenomenon that’s widening a supply deficit for the metal with little additional mine production on the horizon.
Silver, in paste form, provides a conductive layer on the front and the back of silicon solar cells.
But the industry is now beginning to make more efficient versions of cells that use a lot more of the metal, which is set to boost already-increasing consumption.
Solar is still a fairly small part of overall silver demand, but it’s growing. It’s forecast to make up 14% of consumption this year, up from around 5% in 2014, according to a report from The Silver Institute, an industry association.
Much of the growth is coming from China, which is on track to install more panels this year than the entire total in the United States.
Solar is a “great example of how inelastic demand for silver is,” said Gregor Gregersen, founder of Singapore-based dealer Silver Bullion.
The solar industry has evolved to become much more efficient with using smaller amounts of silver, but that’s now changing, he said.
The standard passivated emitter and rear contact cell will likely be overtaken in the next two to three years by tunnel oxide passivated contact and heterojunction structures, according to BloombergNEF.
While passivated emitter and rear contact cells need about 10 mgs of silver per watt, TOPCon cells require 13 mgs and heterojunction 22 mgs.
At the same time, supply is starting to look tight. It was flat last year, even as demand rose by nearly a fifth, figures from The Silver Institute showed. This year, production is forecast to increase by 2% while industrial consumption climbs 4%.
The trouble for silver buyers is that cranking up supply is far from easy, given the rarity of primary mines. About 80% of supply of the metal comes from lead, zinc, copper and gold projects, with silver a by-product. — Bloomberg
